NEW LIMITS ON THE PRESIDENT OF THE UNITED STATES' AUTHORITY OVER TARIFFS

NEW LIMITS ON THE PRESIDENT OF THE UNITED STATES' AUTHORITY OVER TARIFFS

11 May 2026

Between international trade law and constitutional limits, the ruling of the U.S. Court of International Trade reshapes the boundaries of presidential tariff authority, opening new scenarios for businesses, importers, and global supply chains.

On May 7, 2026, the U.S. Court of International Trade (“CIT”) issued a new order (available here) declaring unlawful the generalized 10% tariffs introduced by the Trump Administration through Proclamation No. 11012 under Section 122 of the Trade Act of 1974, thereby redefining the legal limits of presidential tariff powers in the United States.

The decision represents a new chapter in the gradual curtailment of the expansive use of presidential powers in trade matters, following the principles set out by the Supreme Court of the United States in Learning Resources, Inc. v. Trump (2026), which had already invalidated tariffs imposed under the IEEPA.

The CIT majority — composed of two judges — held that the Proclamation was ultra vires, meaning it had been adopted beyond the scope of authority delegated by Congress. The central issue in the decision concerns the interpretation of Section 122(a)(1) of the Trade Act of 1974, which authorizes the President to temporarily impose trade restrictions in the event of “large and serious balance-of-payments deficits.”

According to the CIT, in 1974 Congress used the concept of “balance-of-payments deficits” in a technical and narrowly defined sense, primarily referring to international liquidity deficits, “official settlements deficits,” and the macroeconomic parameters of the so-called “basic balance.” The Administration, by contrast, based the Proclamation mainly on the trade deficit and the current account deficit. In the view of the majority, these indicators do not correspond to the specific concept of “balance-of-payments deficits” referenced by the 1974 legislature. Consequently, the Proclamation failed to identify the statutory prerequisite required for the exercise of presidential authority.

The CIT therefore concluded that the 10% tariffs could not be justified under Section 122. A third judge issued a dissenting opinion, arguing that the majority had interpreted the legislative evolution in this area too narrowly and that the CIT had granted summary judgment without fully complying with the procedural safeguards set forth under USCIT Rule 56(f).

The decision is particularly significant for importers, exporters, and international supply chain operators. On the one hand, the ruling further reinforces the constitutional principle that the power to impose tariffs belongs to Congress and may only be delegated to the Executive through clear, specific, and strictly limited legislative authorizations. On the other hand, the order raises new operational questions regarding tariff refunds, reliquidations, protests, and electronic procedures managed by U.S. Customs and Border Protection through the CAPE system.

For international businesses, the issue is no longer merely political or commercial: it is increasingly becoming a matter of litigation strategy, customs risk management, and the active protection of refund rights.

 

Avvocato Daniele Ferretti, Attorney-at-Law (New York)

 

The information contained in this article is provided for general informational purposes only and does not constitute, and is not intended to constitute, legal advice or any other form of professional advice. The content does not take into account the specific circumstances of any individual case and should not be relied upon as a basis for making decisions without obtaining appropriate professional advice.